DUMMERSTON, Vt. -- There was an interesting post last week by Simon Johnson, the former chief economist for the International Monetary Fund, on The New York Times' "Economix" blog.

Johnson asked the question of whether there is a fiscal
crisis in the United States. His answer is that while there are
serious medium-term issues, by any standard of measure, our nation is not facing an immediate fiscal crisis.

The problem, in his view, is that the politicians and the
media seem to think there is an immediate financial crisis, and they are driving policies on the state and national levels that are damaging to the nation's economic health, while ignoring the things that nearly collapsed the global economy.

"The most immediate problem is that our largest banks and
closely related parts of the financial system blew themselves up in 2007-8," Johnson wrote. "The ensuing recession and associated loss of tax revenue will end up increasing our government debt, as a percentage of gross domestic product, by around 40 percent. Very little of this debt increase was due to the fiscal stimulus; mostly it was caused by lower tax revenue, because of the slump in output and employment."

And, since nothing was done by either political party about
the "too big to fail" banks and the excessive risk-taking culture
that caused the current recession, another financial disaster is
inevitable.

Another elephant in the room that Johnson identifies is
out-of-control health spending. "The issue is most definitely not
about cutting the current level of such spending or immediately
reducing the benefits in Medicare," he writes. "But in the
projections, by 2030 or 2040, the growth of health care spending
ruins us all - whether or not we get the government to pay for it."

Once again, neither party made a significant effort to
address this issue during the health-care debate of 2009-10.
President Obama's health care made a half-hearted attempt at
cost-control, but Republicans are hell-bent on repealing the bill, and have no coherent plan beyond repeal.

The last major problem, as Johnson sees it, is a "completely
antiquated" tax system.

"For the same level of tax revenue relative to GDP, we could
greatly reduce the distortions (e.g., disincentives to work) just by modernizing," he writes. "The right and the left agree that we should tax consumption more and income less, but neither is willing to make any kind of meaningful move toward a value-added tax (VAT).

"The right seems afraid that this tax will be too effective
and power an expansion of government. The left thinks a VAT is
inevitably regressive (imposing more burden on poorer people),
despite all the evidence that the impact of VAT depends on how it is designed - because you can choose what gets zero taxes (e.g., baby clothes) and high taxes (e.g., yachts)."

So, in a nutshell, neither party wants to talk openly
about how reckless behavior by our biggest banks led to a economic disaster. Nor is anyone willing to explain why our health-care costs continue to rise. And, when it comes to taxes, no one wants to see real tax reform.

"Both sides of our political elite have contributed to the
sense of fiscal crisis," Johnson concludes. "And as we continue down this path - dangerous big banks, out-of-control health care
spending, significant tax cuts, small changes in nonmilitary
discretionary spending and irresponsible rhetoric on both sides - we are well on our way to a real crisis."

Johnson didn't offer any remedies, but if we had political
leaders with courage, intelligence and common sense, they would be considering these ideas:

Social Security is still financially sound for the next
30 years if nothing is done. But if the income cap was on the FICA deduction was raised to about $156,000 - which covers about
90 percent of American income - Social Security would be solvent indefinitely.

Immediately rescind the extension of the Bush tax cuts
for the wealthiest 2 percent of Americans, and slowly phase out the rest of them over the next couple of years.

Raise the top tax bracket on the wealthiest Americans,
say those with income over $2 million a year, to 50 percent.

Put in place a financial transaction tax. A 0.25 percent
tax on every stock transaction and a 0.02 percent tax on options,
futures and swaps could raise as much as $150 billion a year and rein in the speculators.

End corporate welfare, the subsides, giveaways and tax
breaks that go to business interests that don't need them.

Cut the defense budget in half over the next five years.
We already spend more on our military than every other nation in the world, combined, and it is not making our nation safer or more secure.

Combine or end duplicate programs within the federal
government. A honest reorganization of government is long overdue.

Finally, solve the health-care crisis by opening up
Medicare to every American who needs health insurance. "Medicare for All" is still the most effective strategy for delivering health care at low cost.

Do these things, and you would see real progress toward
putting the nation on a sounder financial footing.

Unfortunately, no one in a position of power in Washington
possesses courage, intelligence and common sense to do these things. And too few Americans are demanding these qualities from their leaders so that we have a stronger, healthier, more productive nation.

AR's Chief of Correspondents Randolph T. Holhut has been a journalist in New England for more than 30 years. He edited "The George Seldes Reader" (Barricade Books). He can be reached at randyholhut@yahoo.com.